Planned Value (PV)
Planned Value, often called Budgeted Cost of Work Scheduled (BCWS), is the cost allocated for the scheduled work to be completed at any given point in time. In other words, it is the estimated value of the project tasks that should have been completed. It helps project managers to determine if project cost and schedule are progressing as planned. PV sets the baseline against which the actual costs (AC) and earned value (EV) will be compared.
Guide: Understanding and Answering Questions on Planned Value (PV)
What is Planned Value (PV)?
Planned Value (PV), sometimes also known as Budgeted Cost of Work Scheduled (BCWS), is a fundamental concept in Earned Value Management (EVM). It represents the amount of work that should have been achieved as per the schedule and the corresponding budget allocation for that work.
Why is it Important?
Understanding PV is crucial as it provides insight into the planned cost of the project at any time. It can help in monitoring the project's progress and its adherence to the budget, thereby enabling efficient resource allocation and financial management.
How it Works?
PV is calculated using the formula: PV = (Planned percent complete) x (Total Budget). It involves metrics about the tasks that were planned to be achieved at any given point and their associated budgeted costs.
Answering Questions on PV in an Exam
When answering PV questions in an exam, remember to always refer back to the PV formula. Identify the planned percent completeness and the total budget from the question and substitute in the formula to get the PV. For comparative questions, calculate the PV for each situation and then compare to answer.
Exam Tips: Answering Questions on Planned Value (PV)
1. Remember the PV formula: PV = (Planned percent complete) x (Total Budget).
2. In case the question revolves around comparison of PVs in different scenarios, calculate PV for each scenario separately first.
3. In questions involving other EVM metrics, look for relationships between PV, Earned Value (EV), and Actual Cost (AC) as required.
4. Always re-check your calculations.
5. Be careful with units and conversion factors if the budget and planned completeness are given in different units.
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